Page 181 - Martin Marietta - 2025 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Assumptionsare selected on December 31 to calculatethe succeeding year’s expense. Theassumptions selected at
December31, 2024 areas follows:
Discount rate 6.00%
Rate of increase in future compensation levels 4.50%
Expected long-term rateofreturnonassets 6.75%
Average remaining service period for participants 9 years
MortalityTables:
Base Table Pri-2012
MortalityImprovement Scale MP-2020

Using theseassumptions,the Company'spension benefitobligationasofDecember31, 2024 was$967 millionand 2025
pensionexpense is expected to be approximately $23 millionbased on current demographics andstructure of the plans.
Changes in theunderlying assumptions wouldhavethe following estimated impactonthe obligationand expected expense:
 A25-basis-pointchange inthe discount rate wouldhavechanged the December31, 2024 pensionbenefit
obligationbyapproximately $29 million.
 A25-basis-pointchange inthe discount rate wouldnot materially change the2025 expected expense.
 A25-basis-pointchange inthe expected long-term rateofreturnonassets wouldchangethe 2025 expected
expensebyapproximately $3 million.

The Company made pensionplanand SERP contributions of $34 million in2024 and$328 millionduringthe five-yearperiod
ended December31, 2024. In total, the Company’s pensionplans areoverfunded(fair valueof planassets exceedsthe
projectedbenefit obligation) by $271 millionat December31, 2024. The Company expectsto make pension plan andSERP
contributions of $40 millionin2025, of which$25 millionisvoluntary.

Foradditional informationabout pensionbenefit obligationand pensionexpense, see Note J tothe consolidated financial
statements.

Estimated Effective Income Tax Rate
The Company uses theliabilitymethodtodetermine itsprovision for incometaxes.Accordingly, theannualprovision for
incometaxes reflects estimatesof the current liabilityfor income taxes, estimatesof the tax effect offinancial reporting versus
tax basisdifferences using statutory income taxrates and management’sjudgment with respecttoanyvaluationallowances
ondeferredtax assets andaccruals for uncertaintax positions. The result is management’sestimateof the annualeffectivetax
rate (the ETR).

Income fortax purposes isdeterminedthrough theapplicationof the rulesand regulationsunderthe United States Internal
Revenue Code andthe statutes ofvarious foreign, state andlocal tax jurisdictions in whichthe Company conductsbusiness.
Changes in thestatutory taxrates and/or tax laws inthese jurisdictions, as well as changes inthe geographic mix of earnings,
can have a material impactonthe ETRand thecarrying value of deferredtax assets andliabilities. Theeffect of statutorytax
law changes, if material, is recognized whenthe change is enacted.
Deferredtax assets representing future tax benefitsare analyzed by evaluating allavailableevidence, both positive and
negative, to determine whether,based on the weightof thatevidence, allora portionof the expected future benefits is more-
likely-than-not to be realized by the Company. Thisanalysis requires managementto makecertain estimatesand assumptions
about futuretaxable income andprudent and feasibletax planning strategies. The establishmentor increaseof a valuation
allowance increases income tax expense in the periodsucha determination is made; conversely,the decrease of avaluation
allowancedecreases income tax expense in the periodsucha determinationis made.
The Company recognizes atax benefit when it isjudged to be more-likely-than-not,based on thetechnical merits, that atax
position wouldbesustained uponexamination by ataxing authority. The amount to be recognized is measured as thelargest
amount of tax benefit that is greaterthan50% likely of being realized uponultimatesettlementwitha taxing authority that
has fullknowledge of all relevant information.

2024 Annual Report ♦ Page 73